Am I a prophet, or what? - used car edition

After Hurricane Harvey hit Houston, flooding hundreds of thousands of vehicles in the process, I wrote:

[After Hurricane Katrina in 2005] Tens of thousands of Louisiana vehicles were 'exported' to other states, and sold there by their owners on the original title, with no mention made of flood damage.  In many cases, owners insisted that they'd evacuated in their vehicles, which had therefore not been flooded at all.  Only after time had passed did the inevitable damage show up . . . and by then the previous owners were long gone.

. . .

I can only advise my readers to be very, very careful when buying any used vehicle coming out of Texas for the next few months.  It's not just private sales, either.  Entire vehicle dealerships have been flooded, and they may not be fully insured.  They're in a position to have quick repairs done, then ship their inventory to other dealers for resale, thereby avoiding having to take the loss.

Get an in-depth report on any Texas-sourced vehicle from Carfax or similar sources, and look for any insurance payout linked to its VIN.  You might be buying a soggy lemon.

There's more at the link.

To my complete lack of surprise, the National Insurance Crime Bureau has just issued the following video clip and press release.

Flooded vehicles have finally stopped arriving at the Royal Purple Raceway east of Houston. Some 23,000 now await processing and retitling to be auctioned off for parts or to be scrapped. That is just one of several insurance industry salvage locations where more than 422,000 insured vehicles damaged by Harvey have been taken for processing ... In addition, more than 215,000 claims have been filed following damage to vehicles from Hurricane Irma in Florida.

. . .

The VIN numbers are entered into the NICB’s VINCheck database, which is free to the public and will indicate the vehicle has been damaged and branded. They are also entered into the National Motor Vehicle Title Information System (NMVTIS).

Unfortunately, owners of even more vehicles no longer carry comprehensive coverage that covers flood damage and those vehicles are not part of the system. The owner should request a new branded title, but that may not happen. In fact, many flooded vehicles that weren’t insured will be cleaned up and sold with no indication of any damage.

Some unscrupulous buyers will also buy a branded vehicle, clean it up, and take it to another state where they will obtain a “clean” title and sell it with no warning that it has been flooded.

Anyone looking to buy a vehicle in the weeks and months ahead should be on the lookout for hidden flood damage. Here are some tips.

    1. Check vehicle carpeting for water damage
    2. Check for rust on screws or other metallic items
    3. Inspect upholstery and seat belts for water stains
    4. Remove spare tire and inspect area for water damage
    5. Check the engine compartment for mud or indicators of submergence
    6. Check under the dashboard for mud or moisture
    7. Inspect headlights and taillights for signs of water
    8. Check the operation of electrical components
    9. Check for mold or a musty odor

Again, more at the link.

Please note:  those 637,000 vehicles are only the ones that were comprehensively insured - which includes flood damage - and were therefore declared a total loss by insurers.  The figure does not include vehicles that weren't comprehensively insured.  Those will be disposed of by their owners, many of them by any means necessary - even illegal or dishonest ones.

If, during the next year, you buy any used vehicle, you need to be automatically suspicious of its origins.  Follow the above checklist to minimize the risk of problems - and even if the vehicle passes the checklist, I suggest you have it checked out by a qualified, competent mechanic, just in case.  The odds of a rip-off are very, very high right now.  Many people didn't have comprehensive insurance on their vehicles, and they can't afford to lose the money they had tied up in them - so they'll look to sell you their problem, take your money, and use it to buy a replacement vehicle that works.  What's more, they may sell or trade-in their flood-damaged vehicle to a dealer in part exchange for something better, without telling the dealer.  Will the dealer do the honest thing, and take it off his lot once he realizes he's accepted a lemon in trade?  Or will he decide he can't afford the loss, and look to sell it to the next gullible customer, at a profit, rooking them even harder than he was rooked himself?  Given the reputation of used car dealers . . . decide for yourself.

As always, caveat emptor.

Peter